Part 5Miscellaneous income

Chapter 2Receipts from intellectual property

Disposals of know-how

583Charge to tax on income from disposals of know-how

1

Income tax is charged on profits arising where consideration is received by a person—

a

for the disposal of know-how, or

b

for giving, or wholly or partly fulfilling, an undertaking which—

i

is given in connection with a disposal of know-how, and

ii

restricts or is designed to restrict any person's activities in any way.

2

For the purposes of subsection (1)(b), it does not matter whether or not the undertaking is legally enforceable.

3

Subsection (1) is subject to the exceptions in section 584.

4

In this Chapter “know-how” means any industrial information or techniques likely to assist in—

a

manufacturing or processing goods or materials,

b

working a source of mineral deposits (including searching for, discovering or testing mineral deposits or obtaining access to them), or

c

carrying out any agricultural, forestry or fishing operations.

5

In subsection (4)—

a

“mineral deposits” includes any natural deposits capable of being lifted or extracted from the earth and for this purpose geothermal energy is treated as a natural deposit, and

b

“source of mineral deposits” includes a mine, an oil well and a source of geothermal energy.